Re: Government scraps Rs 500 and Rs 1000 notes! I might not make any friends here by saying this, but true corruption exists inside our heads. Honestly, black money is a result of our mindset. Everyone is under the assumption that if you change the system, you will eventually change the mindset. When in reality, if the mindset changes, you won't need to have any systems in place.
Let me prove it with a little off topic example - How many Indians will bother to stop at a red light if there is no cop watching over their shoulder? Very few. Most people on this forum are pretty responsible law abiding drivers. However, we all know the reality when it comes to majority of the population. Same thing applies to the generation of black money. It exists because of us.
Let me give you some examples again...
1- In our markets there is a popular term known as "with bill", "without bill". We all know that if we take an item with the bill, the price will be somewhat higher as the govt takes its cut. Therefore, majority (not all) customers don't mind taking the cheaper option (which is then justified by being called a better deal). If you have ever bought something without a bill, then congratulations, you did your fair share in contributing to black money.
2- I don't know of any business in India (from the smallest to the biggest) that isn't doing some sort of tax planning (evasion). This includes your local "street chat waala" to some billion dollar enterprises. But here is something really interesting. If a street vendor is selling "Chole Bhature" on a cart and is grossing 5000 rupees a day (many do a lot more than that), that is 18.25 lacs in gross sales a year.
Let's assume that on a very conservative level, his profit is 30% (usually it's a lot higher). Technically he should be declaring net profit at 5 lacs plus and filing accordingly. But in the real world scenario, how much is he declaring? We all know the answer is zero. Since all of his transactions will be in cash, he doesn't feel the need to declare anything and no one will ever come to know how much he sold.
And the funny thing is, you'll see this same guy standing at an anti-corruption rally, shouting about how government should do something about the black money issue.
3- Now comes the most interesting question of them all. How many of us are actually honest with ourselves? Are we really declaring everything we're supposed to? Why is everyone looking for friends, family members or trying to figure out ways to find those extra accounts because they have a little more than 2.5 lacs in cash sitting around?
I've seen people praise this move till death and at the same time they are the same folks who are trying to find extra accounts within the family to put some money in.
4- My driver said something rather interesting today - He said, sir "Ab aache din aane waale hain" (better days are about to arrive). When I asked, how do you know? He said, since Modi Ji has caught all those money hoarders, now he will put 2.5 lacs each in our Jan Dhan Yojana accounts and as a result, we'll all live happily ever after.
Technically speaking, his intent behind supporting this move is pure greed. Since he assumes that if the government does this, he'll get free money, he is ecstatic about it. This once again, proves how corrupt our thinking is. He is expecting "FREE MONEY" to arrive into his bank account which wasn't earned by him.
5- How would banning one currency and releasing the next completely eradicate black money? Sure you might see a little slump for the time being. However, over the long term, you'll see black money being generated all over again. Because at the end of the day, a transaction happens between a buyer and a seller.
As long there is cash involved and both the buyer and the seller agree to not pay tax on that specific transaction, the government can make all the laws they want but it won't help. The corruption has to be eradicated from the mindset first. Then everything else will be seamless.
Last edited by rahul_jo : 15th November 2016 at 00:37.
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